Velocity Shares 3x Inverse ETN Natural Gas (DGAZ) is showing strong chart patterns and indicators for its potentially continued move higher.
Following the EIA’s Weekly Natural Gas Storage Report, DGAZ climbed quickly on a storage withdrawal of -94 Bcf, approximately 20 Bcf less than the consensus estimate by analysts.
The strong green candle on the daily chart broke key resistance levels including the 20-day moving average and previous resistance of $7.34. Both the 20-day moving average and the $7.34 level will now act as support as DGAZ attempts to claim new highs.
The next major area of resistance is in the area of $8.35 based on price action in mid-January.
The MACD is also ready to cross over, indicating another bullish move for this inverse exchange traded note. Likewise, the relative strength indicator (RSI) is at 58.04 which leaves room for DGAZ to go higher before reaching overbought territory.
Traders and investors of natural gas will look to developing weather patterns in the first week of February to determine if the current up channel can continue for DGAZ.
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